| In Robert Kiyosaki's series of books on managing | | | | worth the while. But once all the initial groundwork |
| your money, he quotes Rich Dad as comparing | | | | has been settled, most of the time, the investor can |
| investing in stocks like dating, buying investment | | | | then sit back and reap the reward of his efforts as |
| properties like a marriage, and starting up a business | | | | he collects his rental cheque every month.Once in a |
| like being married with children. I am beginning to find | | | | while, parts of the property break down, or tenants |
| out how true it is. | | | | may give some trouble, necessitating some work on |
| Why are buying stocks like dating? For a start, you | | | | the investor's part. It does seem to be a bit like a |
| can get in quickly and easily. With some capital, you | | | | marriage. |
| just need a broker, or an online account, and you can | | | | So why is starting a business like being married with a |
| start buying stocks right away. There is no huge | | | | baby? I guess it means you are now totally |
| commitment involved. You can get out as easily, | | | | committed and stuck! You have to give birth to a |
| almost instantly if the price is right. For many, the | | | | business, nurse it as a baby, pouring time and money |
| initial decision as to which stock to buy does not | | | | into it to help it grow, all this while, not expecting |
| involve much thinking or time invested at all. The | | | | much from it, in the anticipation that one day, it will |
| returns may be small compared to the other | | | | grow big enough to support you many times over. |
| investment vehicles though.But once purchased, the | | | | To take money out of a business too soon would kill |
| stocks themselves require very little maintenance. | | | | it. And just like real children, there is no guarantee the |
| My first experience with investing was buying stocks | | | | business is going to turn out as you hoped. In fact, |
| just based on hot tips from friends. As expected, I | | | | nine out of ten businesses fail. It is like bringing up a |
| lost money. Fortunately, I was able to get out fairly | | | | child only to find he has turned into a useless |
| quickly though it was an expensive lesson. I have | | | | ungrateful adult who refuses to leave home and |
| since learnt to be a little wiser. And while I am not of | | | | prefers to live off his aging parents. With such dismal |
| the level to be considered a professional investor, I | | | | statistics, people who think about starting businesses |
| do hope I am now nearer being called an investor | | | | are advised to plan to fail! It has to be factored in. |
| than a gambler. Fans of Warren Buffett will not agree | | | | Failing is not enough. One has to learn from the |
| with the above analogy, of course. A true | | | | mistakes and change. So following through with this |
| fundamental investor puts in a lot of leg work and | | | | logic, the faster one fails and learns from one's |
| spends a lot of time reading and understanding | | | | mistakes, the faster one can progress. There is no |
| companies before he buys them. And when he buys, | | | | need to know all the steps to getting from Point A |
| he is confident enough to make a substantial | | | | to Point B, as long as you know where Point B is. |
| investment, and then to ride out the market's ups | | | | The steps will slowly come. |
| and downs. Such an investor's holding time is forever. | | | | So why advise someone to go into a business at all? |
| Now buying a property is quite different. Certainly, it | | | | It really depends on what the person hopes to |
| does take a lot more time and running around to find | | | | achieve in life. For someone who values security, the |
| a property that is suitable. One has to find a property | | | | risks may not be worth it. It may be better to find a |
| in a decent location. The property has to be in a | | | | good mutual fund and let the professionals handle it. |
| decent condition, with a good rental yield. Some basic | | | | But for those who value freedom, the potential |
| work needs to be done to make it suitable for rental. | | | | rewards of a good business returning unlimited |
| Bankers have to be consulted as not many have the | | | | amounts of money so freeing them from having to |
| cash to pay for a property without taking a loan. | | | | work may be worth the risks. |
| Calculations have to be done to see whether the | | | | It is up to the individual to decide whether he wants |
| rental income after deducting costs of the loan, | | | | to continue dating for the rest of his life, or commit |
| maintenance and so forth make the investment | | | | himself to marriage and possibly children. |